Be Wary

Thu, Dec 8, 2011 - 4:51pm

It's been a crazy day. Sorry that it has taken me this long to update but the first chance I've had.

First of all, I hope that all of you saw this from last night's post. For simplicity's sake, here's a C&P:

"First, read this:

One of the things we failed to notice prior to the unexpected beatdown in gold in September was that lease rates had moved significantly into negative territory prior to the attack. One of the articles we referenced back then was this one, linked below:

Anyway, here's the point. At -0.5%, lease rates are again near the level they were when gold was savagely attacked last September. One could say that the current, European dollar funding shortage is to blame. Maybe it is and maybe this is just a temporary phenomenon that will not impact the short-term price of gold. However, maybe its a precursor of another big selloff. The banks on the other end of the lease can use the borrowed gold to flood the market with sell orders. I took a bit of grief for not accurately predicting and warning of the September massacre. It gold crashes again over the next few days, don't say you weren't warned this time."

As if on cue, the PMs were savagely beaten today. Gold is off about $50 from its intraday high. Silver is down about $1.50. Is this the next stage of the same, coordinated, central bank, negative lease rate selling like we saw in September? Apparently, I'm not the only one who thinks so:

Look, I know that I just gave you a rather optimistic forecast for December. That was based, however, on what we knew at the time and the current position of the charts. Listen to me now: BE VERY CAREFUL. If you are foolish enough to be trading leveraged, paper metal on the Comex, trying to make some Christmas fiat, BE VERY CAREFUL. Gold, in particular, is in a very precarious position.

You all know of the importance I place on 1705-1710. Well, now that level also corresponds with the lower trendline of the pennant from the September lows. IF 1705 gets taken out overnight or tomorrow (which appears highly likely), buyers will pull bids and gold will rapidly drop toward 1680. IF 1680 fails, gold could fall all the way to 1550. If you are long futures or even something like the UGL and gold falls $150, you're going to get your ass kicked. So, let me say this again for emphasis: BE VERY CAREFUL and watch the 1705 level VERY CLOSELY.



Silver is on pretty shaky ground, too. At this point, I can't imagine it not going to 31 and, if 31 fails, it's going to test the lower end of its range near 30. IF that happens and 30 fails, we may finally see the drop all the way to the long-term trendline that we discussed off and on for the past several months. A drop of this magnitude would take silver all of the way to $25. Again, BE VERY CAREFUL.


OK, onto some other important stuff.

One of the reasons I got behind schedule today is this:

I read this and thought...well, screw it, I'll call Jim myself. We finally connected a few hours ago and we spent a little over an hour discussing current events. Like Santa, Jim is very concerned that the MFing Global situation is going to cause a system-wide crash of epic proportions. This idea of "rehypothecation" MUST BE STOPPED! If it is allowed to continue, a precedent will have been set that enables creditor firms to raid and steal your assets.

Let me explain. Recall that the bankruptcy law changes of 2005 reordered the subordination of creditors. It used to be that bondholders were the most senior of creditors in a bankruptcy. Now, derivative holders are the most senior...senior even to bondholders! If there was ever a more devious, pro-WallSt law created, I'm not sure I've seen it. Anyway...if a firm comingles or "rehypothecates" its assets with clients assets and then uses these funds to buy CDS, the derivative (credit default swap) holder (counterparty) can lay claim to the brokerage or clearing firms assets if that firm declares bankruptcy. Not just the firm's assets but their clients' assets, as well. This is the justification that JPM is using for stealing the MFing Global clients' funds.

If this is allowed to stand, the next time a firm fails (think BoA or Wells or Citi or any bank, broker or mutual fund company), a company like JPM or whomever is the counterparty on the bankrupt organization's CDS, will have precedent to step in and keep (steal) client money to settle their claims. THIS IS OUTRAGEOUS!

I mentioned above that the conversations that Jim and I have are off the record. He did allow me this one quote, however: "If you have money invested anywhere, leave only the amount of money in the system that you are willing (or intend) to lose." Your ultimate risk is that you may wake up one day and find that your life savings have simply vanished.

Look, I could be all wrong about this. Maybe everything will be OK. Maybe this rehypothecation thing is no big deal at all. Please don't take my word for it and then act in haste. Do your own research. Draw your own conclusions. I'm just someone who has been given access to people and information that I never in a million years would have dreamt I'd have. I have a duty to pass along to you what I think. Consider this information but do your own homework, too.

Lastly, I must touch upon the Iran drone thing. We all heard last weekend Iran claimed to have shot down an unmanned, U.S. spy drone.

Then, earlier this week I read this:

I was incredulous. Could Iran really have been able to electronically "hijack" a U.S. spyplane? No way! Well, sure as shit, they did! Take a look at this:

First of all, for those who claim that debka is unreliable and full of shit...maybe not! I've always maintained that debka gets their info directly from sources within The Mossad. Therefore, the site must be read daily. Next and more importantly, the hijacking of a U.S. spy drone is extraordinarily bad news for the U.S. First, just the fact that it actually happened is bad enough. Then, the realization that U.S. military technology infrastructure can be so easily compromised is frightening. If you can hijack a drone, can you launch a missile? Lastly, I fear that this realization will force the U.S to retaliate, either directly or through the allowed action of Israel.

The point is...MENA war continues to get much closer to reality with each passing day and a war between the U.S., Israel and Iran would have serious, global implications.

We often talk about "when the shit hits the fan". Well guess what, between the euro crisis, rehypothecation and MENA war, the shit is hitting the fan right now. Whether or not it all grows into a massive, global shitstorm this week or this month, is irrelevant. It has started. We are in it right now and it's only going to get worse. Continue to prepare accordingly.


About the Author

turd [at] tfmetalsreport [dot] com ()


Captain Silver · Dec 8, 2011 - 4:53pm

Thanks Turd!

Oh yeah, and FIRST!

pheeseas · Dec 8, 2011 - 4:53pm

Thursday, December 8,

Thursday, December 8, 2011

Jon Corzine Is Full Of Shit And A Liar

Jon Corzine has released the written testimony that he will make before Congress today. It has been highly polished up by his legal advisers and contains so many "I can't recall's" that even Bill Clinton would blush. While the entire testimony has very little credibility with regard to substantive issues, I just want to address one specific quote from the testimony because I know - for a fact - that Corzine is lying. From page 17 of the prepared testimony:
I did not, however, generally involve myself in the mechanics of the clearing and settlement of trades, or in the movement of cash and collateral. Nor was I an expert on the complicated rules and regulations governing the various different operating businesses that comprised MF Global. I had little expertise or experience in those operational aspects of the business.
Here's the full testimony: LINK If you take the time to read the full testimony, please try not to puke like I nearly did over the obvious lies and legally refined statements which are designed to obfuscate and cover-up the truth.

Now, earlier in the testimony, Corzine lays out his history of employment and experience in the securities industry. For much of his career, he was in oversight and management roles which would have required that he passed certain industry exams. One of them is the Series 24 principal's exam. Having just studied for and passed this particular exam, I know for a fact that the material covers the rules regarding "movement of cash and collateral." I spent a few hours making sure I understood exactly what the regulations prescribe. For Corzine to have been promoted into the positions he lays out in his testimony, it means he had to pass the Series 24 exam and he spent part of his time at Goldman having to deal with the issues from a practical standpoint covered by the material in the Series 24. In other words, he knows the regulations and mechanics and he's lying in his testimony.

Moreover, having worked as a trader on a big bond trading desk, as Corzine did at Goldman (he ultimately ran the Government bond trading operations at one point), I know for a fact he had to have been intimately aware of and knowledgeable about "back office" (the functions to which he refers to as "clearing and settlement") functions and mechanics. It would be impossible that he would have risen through the ranks at Goldman in the bond trading business and not have spent a good part of his of time understanding and dealing the "back office operations" of the securities trading business. Impossible.

Unfortunately for justice - but fortunately to prove my contention that he will extract himself from facing prison by exploiting the inability of Congress to ask the right questions - the people who will be grilling him, Senators and Reps, have no knowledge of how Wall Street functions and they will not take the time to figure out the right questions to ask. Nor will they make an earnest attempt to hold him accountable.

There's plenty of other statements that can likely be proved to be false. For instance he claims to have not made contact with NY Fed Chairman Bill Dudley during his time at MF Global. Those two worked together at Goldman Sachs. MF Global was admitted to the Fed as a primary dealer under Corzine. I find Corzine's statement therefore exceedingly difficult to believe. Let's see the phone and email records. But the best shot this country has seeing justice served against Corzine is having private lawsuits waged against him which will bring in expert witnesses to educate the courtroom and jury as to exactly why Corzine's testimony today is one big lie. Let's hope and pray that happens. Posted by Dave in Denver at 6:32 AM 22 comments Links to this post
Economical Disaster · Dec 8, 2011 - 5:04pm
tpbeta · Dec 8, 2011 - 5:06pm

I want my $25 silver...

..and I want it now. Come on Blythe, hurry the hell up. I need to get my fiat out of fiat.

Teach · Dec 8, 2011 - 5:06pm


That's "F**k the system, before the system f**ks you."

cib · Dec 8, 2011 - 5:07pm

gold beatdown

So Draghi's comments this morning had nothing to do with this morning's selloff and all to do with what you are saying here Turd? Why did everything sell today? Its funny because Gold/silver have been trading with the market lately.

Santa's Elf · Dec 8, 2011 - 5:10pm


Perhaps I'm overreacting, but the concept of rehypothecation and Turd's post today is without a doubt the scariest thing I've contemplated in months. Without a doubt, the ramifications of this are nothing short of catastrophic. I posted this some time ago and feel a repost is in order, so please forgive if you've read this before. These comments come from former Secretary of Agriculture, Ezra Taft Benson, back in 1967. His haunting words sound like they could have been penned today:

"The pending economic crisis that now faces America is painfully obvious. If even a fraction of potential foreign claims against our gold supply were presented to the Treasury, we would have to renege on our promise. We would be forced to repudiate our own currency on the world market. Foreign investors, who would be left holding the bag with American dollars, would dump them at tremendous discounts in return for more stable currencies, or for gold itself. The American dollar both abroad and at home would suffer the loss of public confidence. If the government can renege on its international monetary promises, what is to prevent it from doing the same on its domestic promises? How really secure would be government guarantees behind Federal Housing Administration loans, Savings and Loan Insurance, government bonds, or even social security?

"Even though American citizens would still be forced by law to honor the same pieces of paper as though they were real money, instinctively they would rush and convert their paper currency into tangible material goods which could be used as barter. As in Germany and other nations that have previously traveled this road, the rush to get rid of dollars and acquire tangibles would rapidly accelerate the visible effects of inflation to where it might cost one hundred dollars or more for a single loaf of bread. Hoarded silver coins would begin to reappear as a separate monetary system which, since they have intrinsic value would remain firm, while printed paper money finally would become worth exactly it's proper value--the paper it is printed on! Everyone's savings would be wiped out totally. No one could escape.

"One can only imagine what such conditions would do to the stock market and to industry. Uncertainty over the future would cause the consumer to halt all spending except for the barest necessities. Market for such items as television sets, automobiles, furniture, new homes, and entertainment would dry up almost overnight. With no one buying, firms would have to close down and lay off their employees. Unemployment would further aggravate the buying freeze, and the nation would plunge into a depression that would make the 1930s look like prosperity. At least the dollar was sound in those days. In fact, since it was a firm currency, its value actually went up as related to the amount of goods, which declined through reduced production. Next time around, however, the problems of unemployment and low production will be compounded by a monetary system that will be utterly worthless. All the government controls and so-called guarantees in the world will not be able to prevent it, because every one of them is based on the assumption that the people will continue to honor printing press money. But once the government itself openly refuses to honor it--as it must if foreign demands for gold continue--it is likely that the American people will soon follow suit. This in a nutshell is the so-called 'gold problem.” (The Teachings of Ezra Taft Benson p 639-640.)

33 and a turd · Dec 8, 2011 - 5:10pm


Why has nobody asked why high profile customers got their money out when the getting was good?

sixdollarsilver · Dec 8, 2011 - 5:10pm



[edit-doh!, go forth and multiply]

GoldMania3000 · Dec 8, 2011 - 5:15pm

and the chinise are saying...

stupid westeners...they are buying their arses off

fast mover · Dec 8, 2011 - 5:15pm

Check out LBMA AM/PM price fixing


I have been working hard to share my research regarding the known gold futures fixing by the LBMA. I have put together a blog and would invite you to check it out:

You can follow the system results here:


meegoreng1 · Dec 8, 2011 - 5:22pm

@ Turd

"Then, the realization that U.S. military technology infrastructure can be so easily compromised is frightening."

How could this be frightening? Why is US snooping around in the first place? What's really frightening is the sheeple in US, through the influence of controlled media, that are allowing the US military complex dominate our foreign policy. Wake up! Our great country has been hijacked by these lunatics!

Yes, the drumbeats of war is coming to a climax. I hope and pray that doesn't happen. Lots of innocent people will die and suffer because of it.

U.S. President James Madison said:

"If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy."

Bsong · Dec 8, 2011 - 5:22pm


I'm skeptical of the drone hijacking. Iran published a video of the supposed drone today and it had no signs of any wear. Which made me think that if the technology was so advanced wouldn't there be a self destruct command of some sorts should the appropriate communications brake down? Damn, I find myself not trusting anything these days.

ewc58 · Dec 8, 2011 - 5:29pm

Ranting Andy on RBN right now until 7 est

Ranting Andy Interviews with John Stadtmiller, host of the National Intel Report on the Republic Broadcasting Network

Ranting Andy and John Stadtmiller will discuss the precious metals market and the economy. To listen to the broadcast over the internet go to: and click on "Listen Live" in the upper right hand corner.

TONIGHT @ 5pm-7pm est (2pm-4pm pst)


MP3: 32k | 16k | 8k
Listen in your Web Browser


Dr Durden · Dec 8, 2011 - 5:33pm


My new favorite. Good one, Teach.

Loved how the ES gave the longs a nice titty twister there in the last few candels. 

beardeus · Dec 8, 2011 - 5:34pm

Guys like Corzine are protected. If it has anything to do with helping the Morgue its kosher. Fortunately these old bastards will all die one day and will be set to meet their maker.

Who is worse? The murderers or these guys?

zilverreiger · Dec 8, 2011 - 5:37pm

some more news

some more news infotainment

¤ · Dec 8, 2011 - 5:40pm

Nicely done

Thanks for every part of that postyes

That took time to put together and was far ranging for sure. 

The drone thing and being hijacked is one for the history books if that happened the way it's laid out. This will not go unanswered because this is how these things usually work out. The U.S. has been harping on computer hacking at the highest levels for quite some time. China or Russia (both?) helped Iran pull this off. 

The only twist I can possibly see to this would have been for the U.S. to purposefully allow for it to happen and have a tracking device (no doubt) and watch and geo-locate the whole drama and learn a lot from it and then calculate what to do. Sounds far-fetched maybe. It's definitely doable. Did they bait them? We'll soon find out. 

Consider the deployment recently to Australia seemingly out of the blue. Sounds like pre-planning.

Bummer stuff, but it's reality and were in the moment. TSHTF moment possibly. 

ewc58 · Dec 8, 2011 - 5:40pm

Santa's elf

You just described how the rug could be pulled out if and when the global financial oligarchy want to do that.

From Santa the Elder :-)

My Dear Extended Family:

Eric King of King World News was kind enough to interview me today about the growing fears about the stability of our financial system.

To listen to the interview click here to visit King World News...

NW VIEW · Dec 8, 2011 - 5:41pm


Your late night post was an eye opener. I was able to sell in the pre-market and could have bought it back at a much lower price IF I would have wanted. That post was a money saver for many on this board and is one of the reasons to keep it active. Thanks for saving this group a million dollars today.

It appears that it may just have come to the time when some of us should and must close out some of these trading accounts. I have two at Scottrade and I will most likely sell the balance of all positions in one. 

My view of this mess is that we have already lost this war on many fronts. We here in America have traveled the world with our big stick for too long. Now other nations have found some big sticks also. The days of John Kennedy telling the Russians to take their missiles back home or we will nuke you, will not work today.

All of mankind is looking for and hoping for someone to rise up who sees a solution to the world problems who only wants the good for all. Many false prophets are on the tube every day but they are void of the Truth.

We can have a ranch in Idaho, spuds in the garden, a big can house and a huge stack of metals, however, when a nuke comes from China, that items will not be any better than a tin foil hat.

Being prepared means different things to different people. Example: One day long ago when I was driving home from college, I saw a home that was on fire. I stopped to help these two ladies who were running in and out of the home carrying clothes. The problem was that they were taking the arm loads of clothes into the burning home. I stopped them because I thought they we confused. They told me to stay out of their way because they were going for the insurance check. They were preparing but not with wisdom, only greed.

It is time to be ready for a new world being forced upon us. JMO

gatortrader · Dec 8, 2011 - 5:42pm


So who's the contrarian here? Looks like the herd thinks that gold and stocks are going to get crushed, and the dollar will rally. So the Contrarian thinks this was a headfake and the dollar plummits in the next 12 hrs, gold, stocks fly on a friday just in time to bring in the santa rally, in the process having sucked in a lot of shorts and suckers the day before. Hmm, will be interesting next 24. If 1705 holds, gold won't stay below 1750

Be Prepared · Dec 8, 2011 - 5:46pm

Question for Turd?

Thanks Turd for putting together your thoughts. I wish that I had been a mouse on the phone when you were talking to Jim Willie....I'm sure that it was an earful. 

I have a question that I hope you don't mind me asking.....I realize that we all need to do our own research and make our own decisions, but, at this point, are you taking your money off the table and out of brokerages and banks? Are you going to continue trading futures or in the stock market based upon your thoughts presented above?

Certainly, we all need to keep a certain amount in a financial institution to pay bills, etc. The challenge for all of us is the timing of the pull out because when we do we are eliminating any possibility of fiat growth. Until a collapse or conversion, there are some advantages to keep advancing the fiat growth for conversion at the right time. As we teeter on the edge, we all have to live two normal and one for the next stage. So I believe our discussion, not necessarily about trading, but about moving out of the system in stages should include thoughts about the timing. Thanks.

GoldMania3000 · Dec 8, 2011 - 5:48pm


you bring up a good point. I'm no expert in this thing, but if TURDs call to a possible breach of the trend lines, i would suspect there would be so much buying? I tell you this, the gold stocks will be on such a sale I'd probally throw a lot of liquidity at them. I would think there would be lot's of scooping up at 1600$. If they push it down, it won't stay down long..but i don't know..

What would a contrarian do, ask Rick Rule:)

RedRover · Dec 8, 2011 - 5:50pm

  Also, Buudha Princess if

Also, Buudha Princess if you're out there.. I sent you the
Brother John F, last night & now it's not as valuable of a
video, b/c time has passed. It's old news, so to speak.

SilverWealth · Dec 8, 2011 - 6:01pm

thanks Turd

a silly question regarding the Willie contention.

Fidelity and Interactive and other brokerage houses claim to carry Federal insurance on accounts just like Bof A for example.

How does insurance play out in this scenario? Is it just a false hope that lures the sheeple into staying? Will you not be paid back or insured? Will you have to wait an indeterminate time to be paid back? Will they just jack the goal posts around and pay you back only fractionally?

From the other perspective it would seem that Jim's scenario would guarantee hordes of upper middle class people taking immediately to the streets. It would promise heavy rioting and revolution. No question about it.

How would they pull such a grand theft off. Yes under commodity rules there is no insurance. But FDIC and the one that insures brokerage houses guarantees reimbursement, correct? And there are quite literally millions of those accounts that would be made vulnerable. You could have several lmillion in the streets literally overnight.

Santa's Elf · Dec 8, 2011 - 6:03pm

@ ewc58

Thanks for the link. Earlier, I read the excerpt of Santa's interview on KWN....looking forward to listening to the whole audio!

SilverWealth · Dec 8, 2011 - 6:03pm

in addition

The thieves may covet brokerage accounts but doesn't this kill the goose that lays the egg? Trading volume and net asset values of houses would just dry up wouldn't it?

I Run Bartertown · Dec 8, 2011 - 6:07pm

Love ya Turd

I do, and I know you get pissed at people acting as if you don't know shit. I'm not doing that, just trying a legitimate discussion. These two things jumped out at me and, like a friend over a beer, I'm saying 'huh, wtf bro?':

TF - " I've always maintained that debka gets their info directly from sources within The Mossad. Therefore, the site must be read daily."

Me - You agree that it is the propaganda arm of an intelligence service, but it must be read? Hmm..well I guess, in a way..I mean, I read La Raza's Reconquista plans, and the Black Panther Party's exterminate Whitey plans, and American socialist publications like Incite, so I guess all info and disinfo can be read and tossed in the mix.


TF - " Lastly, I fear that this realization will force the U.S to retaliate"

Me - Umm, we flew a drone into their airspace. Them commandeering the drone was the retaliation. Whatever we do will be escalation of offensive hostilities, not retaliation.

enlightenedBottom line, I just want the code they used to take control of the drone!angel

Good fun to had by all!! OK, well not all, but surely ME!!!!

cpnscarlet · Dec 8, 2011 - 6:13pm

One thing about gold lease rates?

The GATA article talked about three-month lending, so can we expect this whole thing to prang back in February or so? And boy, that ftalphaville article is tough to follow.

I really do give up trying to understand this, but I think that's one of the goals of the EE. Well, I guess I'll just have to keep stackin'. It seems the only logical response still to this environment.

I Run Bartertown · Dec 8, 2011 - 6:26pm

NW View

"We can have a ranch in Idaho, spuds in the garden, a big can house and a huge stack of metals, however, when a nuke comes from China, that items will not be any better than a tin foil hat."

Not at all, bud. Nukes aren't what you seem to think. Many will survive, and the scenario you describe would have me feeling pretty rosy. Look at this site and you can 'nuke' anywhere on the map and choose your variety of nuke to see the radius of destruction.

If they were really the end of the world, Bartertown would've signed on to the Non-proliferation Treaty ;-) 

They're just the end of cities...and, let's face it, most US cities kind of need it.

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Key Economic Events week of 12/10

12/11 8:30 ET Producer Price Index
12/12 8:30 ET Consumer Price Index
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Key Economic Events week of 11/19

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